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Ombudsman "more than likely" to investigate city councillor

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The State Ombudsman says he is “more than likely” to investigate whether city councillor Sandy Wilkinson breached local government conflict of interest laws, InDaily can reveal.

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Wilkinson, a heritage consultant, voted to increase a council subsidy for professional services related to heritage restoration at a council meeting last month.

The motion increased the subsidy offered to home owners restoring their heritage properties under the council’s Heritage Incentives Scheme – from 50 per cent of professional services fees to 75 per cent of professional services fees (capped at $10,000).

Wilkinson told that meeting that the professional services fee subsidy results in “more good conservation work” occurring and, as InDaily revealed earlier this week, he has conceded that the motion may indirectly financially benefit his own business.

Ombudsman Wayne Lines told InDaily this morning that he was likely to investigate the matter.

“I guess there is the possibility that they [the council] put a complaint to me and I exercise my discretion not to investigate, based on the information provided,” he said.

“But more than likely there will be an investigation one way or another.”

He said he had given the city council two options.

“The options are that they lodge a complaint with me to consider, or I mount my own investigation,” Lines said.

“So I have given it over to them to decide which way they want to go.”

He added that any investigation would be undertaken confidentially.

Wilkinson’s actions are expected to constitute a test case for new conflict of interest laws for local government across South Australia, which passed state parliament in March.

He told InDaily this morning that he had received legal advice that he had not broken the law by participating in the vote.

He said that, according to the legal advice, he was not required to declare an interest or absent himself from meeting because a material conflict of interest only exists under the law if a councillor “would” receive a benefit or suffer a loss depending on the outcome of a particular vote.

Area councillor Sandy Wilkinson. Photo: ACC

Area councillor Sandy Wilkinson. Photo: ACC

“Accordingly, there is no possibility that I have committed an offence under Section 74(1) giving rise to the penalties in Section 74(4)(1)(b),” his statement says. The statement is reproduced in full at the end of this article.

According to those provisions of the Act, a councillor who votes on a matter where she or he has a material conflict of interest can be fined up to $5000 – where there is no intention to gain a benefit from the vote.

A councillor can be imprisoned for up to four years, or fined up to $15,000 if there is intention to gain a benefit.

InDaily is not suggesting that councillor Wilkinson intended to gain a benefit from the vote.

City council CEO Mark Goldstone told InDaily this morning that councillors would be provided with additional training on conflict of interest.

“I am treating this matter seriously,” Goldstone said in a statement.

“I’m continuing to take advice from a range of sources both within and outside [the] council.

“In 2017 council will offer additional training to councillors around the new conflict of interest provisions introduced earlier this year.”

Central ward councillor Houssam Abiad told a council meeting on Tuesday night – hours after the publication of InDaily’s report – that the council must act quickly and investigate the matter to avoid ongoing “reputational damage”.

He proposed that council staff produce a report on the matter, and on any “inaccuracy” in InDaily’s story.

But area councillor Anne Moran said it was up to an individual councillor to make a complaint regarding any potential conflict of interest, and: “That is why this council, in my 21 years, has never done that, because it’s a fairly aggressive act.”

Wilkinson told the meeting that he had sought legal advice on the issue and “that legal advice is that I had no conflict of interest, so that I was correct in staying in the room when I voted on that matter”.

“But given the nature of this amendment, I think it would be appropriate for me to leave the room at this juncture for the vote,” he said.

Abiad’s motion failed: councillors Natasha Malani, Priscilla Corbell and Alex Antic were the only other councillors who voted for it.

Abiad said this morning that he had not identified any specific inaccuracy in InDaily’s story, but that he had requested the report to clarify the facts of the matter and to protect the council’s reputation.

Wilkinson’s statement in full:

Councillor Sandy Wilkinson told InDaily today that he had received written legal advice to the effect that:

  1. He had not breached the material conflicts of interest provisions in Section 73 and 74 of the Local Government Act 1999 (“the Act”) by participating in debate and voting on the Committee and Council Agenda Item “Review of Heritage Incentive Scheme Operating Guidelines” on 8 and 22 November 2016 respectively.
  2. Section 73(1) only creates a material conflict of interest where the member “would” gain a benefit, or suffer a loss, depending upon how the matter was decided.
  3. The word “would” in this sense means (in effect) “will” gain a benefit or suffer a loss as opposed to, for example, “may” or “might” at some time in the future depending upon whether other facts or circumstances occurred.
  4. The use of the word “would” by Parliament suggests that there must be a direct temporal (immediate) cause and effect by the resolution of Council and the conferring of the benefit or the suffrage of the loss.
  5. Section 73(1) does not potentially apply, in any event, as the incentives are paid to the owners of heritage properties rather than, for example, their architects or building design consultants.

Councillor Wilkinson said that the unequivocal legal advice received was that there was no requirement for him to declare an interest or absent himself from the meeting under Section 74 of the Act.

“Accordingly, there is no possibility that I have committed an offence under Section 74(1) giving rise to the penalties in Section 74(4)(1)(b).

“During consideration of this matter, it has been drawn to my attention that a separate Section dealing with ‘perceived conflicts of interest’ was included in the Act by an amendment in March 2016. Section 75A, which is not a penalty provision, requires a member to disclose a “perceived” conflict of interest where the member could reasonably be taken from the perspective of an impartial, fair-minded person to have a conflict of interest in the matter.”

Councillor Wilkinson said that this section did not, and is not intended to, preclude him from participating in discussion or voting on the item, but required him to make a statement to the meeting identifying the fact that an independent observer might perceive that he had a conflict of interest.

Councillor Wilkinson said that he had now obtained advice regarding the form of the declaration to use in any similar position in the future.

 

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